BlackRock Revamps Fund to Align with New U.S. Stablecoin Regulations

According to Cointelegraph, BlackRock has restructured one of its prominent money market funds to comply with new U.S. stablecoin regulations. The asset management giant, overseeing $13.5 trillion, has introduced the BlackRock Select Treasury Based Liquidity Fund (BSTBL) to manage reserves for companies issuing U.S. dollar-pegged stablecoins. This initiative provides a secure option for these companies to store customer funds. Jon Steel, BlackRock’s global head of product and platform for cash management, emphasized the firm's ambition to be a leading reserve manager for stablecoin issuers. BlackRock's move aligns with the GENIUS Act, a regulatory framework for stablecoins signed into law by U.S. President Donald Trump earlier this year. The fund, previously known as the BlackRock Liquid Federal Trust Fund, has been renamed and restructured. It now invests solely in short-term U.S. Treasury securities and overnight repurchase agreements, offering an ultra-safe, highly liquid investment vehicle targeted at institutional investors, including stablecoin issuers. The changes, approved by BlackRock's board, became effective on Tuesday, featuring extended trading hours until 5:00 pm Eastern Time and later valuation times. The fund's summary prospectus outlines its fees and operating expenses, including a 0.21% management fee and a 0.10% shareholder servicing fee, culminating in total expenses of 0.27% after waivers. A fee waiver agreement is in place until June 30, 2026. BlackRock's strategy aims to attract more stablecoin issuers, building on its existing partnership with Circle, the issuer of the USDC stablecoin. As stablecoin adoption grows, the BSTBL fund seeks to extend this model to additional issuers, responding to the increasing demand for regulated, yield-bearing reserve options. Citi analysts have projected a significant rise in stablecoin issuance, from $280 billion currently to an estimated $4 trillion by 2030, highlighting the sector's vast growth potential. This development underscores BlackRock's strategic positioning in the evolving financial landscape, as it adapts to regulatory changes and market demands.